EMI to Apple, Microsoft: Ditching DRM is going to cost you

EMI and other record companies are pleased enough with the status quo that …

Earlier this month it was widely reported that EMI was indeed ready to cast DRM into the dark abyss and earn the company the honorable status of being the first major music label to realize that DRM alienates honest customers. As it turns out, the company is indeed open to the possibility of ditching DRM, but they expect to be paid well for it, and the online music retailers aren't ready to meet their demands.

EMI is the only major record label to seriously consider abandoning the disaster that is DRM, but earlier reports that focused on the company's reformist attitude apparently missed the mark: EMI is willing to lose the DRM, but they demand a considerable advance payment to make it happen. According to Bloomberg, EMI has backed out of talks for now because no one will pay what they're asking. No dollar amounts are known at this time.

Online music giants Apple and Microsoft, along with smaller players including RealNetworks and Yahoo! Music, sought to indulge EMI's demands by waving leafy-green dollar bills at the company, but it wasn't what EMI asked for, and the company subsequently put the talks on hold. Warner's renewed interest in EMI is likely another contributing factor to EMI's own cold feet: Warner's leadership is devoted to DRM, making the DRM-free discussions all the more circumspect.

Down with DRM, up with prices?

While it has become a truism in tech enthusiast circles that 'no DRM equals more sales,' EMI and other record companies are pleased enough with the status quo that they expect any "risk" to be shouldered by retailers. If a "non-DRM tax" of sorts were applied to music, online retailers would have no choice but to increase the cost of downloadable music.

Some readers have indicated to us that they'd happily pay more for DRM-free downloadable music from an online retailer, yet it is unclear as to why DRM-free music should cost more. To return to a point made famous by Steve Jobs, the overwhelming majority of CDs sold today already come without DRM on the discs. Furthermore, pirated copies of music are readily available online. As a result, it's not very clear to us why online music that is sold without DRM would need to cost more, but given the razor-thin margins in that market, a "no DRM tax" is quite likely to be passed on directly to consumers.

Ken Fisher / Ken is the founder & Editor-in-Chief of Ars Technica. A veteran of the IT industry and a scholar of antiquity, Ken studies the emergence of intellectual property regimes and their effects on culture and innovation.